Amaravati, Aug 2026 : The Andhra Pradesh government, led by Chief Minister N. Chandrababu Naidu, has approved a new model for slum redevelopment aimed at providing modern housing to residents while making greater use of private investment and the value of urban development rights.
The initiative will begin with the redevelopment of the Velampeta slum in Visakhapatnam and is expected to serve as a pilot for similar projects across the city and other urban areas of the state.
Taking inspiration from large-scale urban redevelopment initiatives such as Mumbai’s Dharavi redevelopment, the state government plans to use the value of development rights to facilitate the construction of modern housing without placing the entire financial burden on the government.
Under the approved plan, the Greater Visakhapatnam Municipal Corporation (GVMC) has been authorised to redevelop the Velampeta Slum in Zone-IV, Ward No. 35 under the Visakhapatnam Economic Region (VER) Programme. The project will be implemented on a Design, Build, Finance and Transfer (DBFT) basis.
The proposed development will provide 177 housing units on a compact plot measuring approximately 1,986.45 square metres. Given the limited availability of land in the densely populated area, the project will involve the construction of a high-rise residential complex with a maximum height of up to 45 metres.
A key feature of the redevelopment model is the use of Transferable Development Rights (TDR) instead of depending entirely on conventional government funding. Under the arrangement, the successful private bidder will undertake the redevelopment in return for TDRs.
The government has approved a maximum TDR ratio of 1:4 as the bidding parameter. The project will be awarded through a competitive tender process, with bidders required to quote the TDR they would need in lieu of the construction cost.
The government believes the approach can create a market-driven mechanism for unlocking the value of urban land while ensuring that existing residents receive improved housing within their neighbourhood.
To make the project financially and technically viable, the government has also approved several special relaxations and exemptions under the Andhra Pradesh Building Rules.
These include permission to construct a high-rise building in a congested urban location, reduced setback requirements and parking provision equivalent to around 10 per cent of the total built-up area, compared with the normally prescribed 22 per cent. Certain fees and charges payable to GVMC, urban development authorities and other government agencies have also been waived.
The government has directed GVMC to complete the Velampeta redevelopment within a defined timeframe and treat the project as a pilot that can provide a framework for similar slum redevelopment initiatives under the Visakhapatnam Economic Region Programme.
The proposed model places emphasis on in-situ redevelopment, allowing residents to receive modern housing without being permanently relocated away from their existing communities. This is expected to be particularly significant in densely populated urban areas where relocation can disrupt livelihoods, social networks and access to essential services.
The government has also stressed that redevelopment should not end with the construction and allotment of houses. A post-allotment management framework will have to be established to ensure the maintenance of common areas, utilities and other facilities before possession is handed over to beneficiaries.
Developers and authorities will also be required to comply fully with fire safety regulations, energy conservation standards and other statutory requirements applicable to the project.
Beyond the Velampeta pilot, the government has initiated work towards creating a broader policy framework for urban redevelopment. It has directed the Commissioner and Director of Municipal Administration to prepare a draft policy covering slum redevelopment and middle-class housing, in consultation with relevant departments and stakeholders.
The initiative represents a shift in the state’s approach to urban housing, with the government seeking to combine public policy, private investment, land value and development incentives to address housing challenges in densely populated areas.
Officials said the Visakhapatnam model could eventually become a scalable framework for rejuvenating ageing and congested settlements across Andhra Pradesh. By leveraging scarce urban land more efficiently while providing better housing for existing residents, the government hopes to combine social welfare with planned urban development.
The Velampeta project will therefore serve as an important test of whether development rights and private participation can be effectively harnessed to create modern, affordable and sustainable housing without imposing a disproportionate financial burden on the state exchequer.
